Maryland lawmakers approve nation’s first tax on digital ad revenue

Maryland’s state Senate on Friday voted to override Gov. Larry Hogan’s (R) veto on legislation imposing a tax on digital ad revenue, making it the first state to adopt such a measure.

The 29-17 vote followed a similar one by the state’s House of Delegates Thursday and comes as more states across the country have begun introducing similar measures to tax tech giants like Google, Facebook and Amazon.

According to The New York Times, Maryland’s tax could bring an estimated $250 million in the first year after enactment, with the money set to go toward schools across the state.

In a Facebook post ahead of the vote Friday, Maryland Senate President Bill Ferguson (D), a former teacher for Teach for America, wrote the measure is meant to ensure “big tech pays their fair share while making billions of dollars a year using our personal data to sell digital ads.”

“This targeted tax on companies that make over $100,000,000 a year ONLY from digital advertising is a vital mechanism to make sure big tech pays taxes in Maryland, just like our small businesses,” he continued.

He went on to say, “At a time when Maryland’s budget is being impacted in unforeseen and astronomical ways due to COVID-19, Maryland families and businesses can foot the bill, or big tech can start paying their fair share.”

Hogan vetoed the bill last May, arguing at the time that it would “raise taxes and fees on Marylanders at a time when many are already out of work and financially struggling.”

The GOP governor added then, “With our state in the midst of a global pandemic and economic crash, and just beginning on our road to recovery, it would be unconscionable to raise taxes and fees now.”

The Internet Association, a trade group representing companies like Facebook and Google, said in a statement following the Maryland House vote Thursday that the tax would negatively impact small businesses that rely on digital advertising as “a critical lifeline” to gain new customers, according to CNN. 

Lawmakers in Connecticut and Indiana have proposed similar tax measures, while other states like West Virginia and New York fell short last year of passing taxes aimed at tech giants.